Chinese alternative investment firm CDH Investments, U.S. private equity firm Silver Lake Partners, and Chinese private equity firms Yunfeng Capital and Primavera Capital have led a US$1.1 billion round in Koubei, Alibaba Group Holding’s local on-demand affiliate.
The investment is CDH’s largest ever deal in the technology, media and telecommunications sector, the firm said in a statement. The latest round values Koubei at US$8 billion post-money, according to Chinese media reports.
"The local service business is reforming with the traditional group-buying model no longer bringing value to local businesses," said Xie Fang, a managing director at CDH Investment. "However, Koubei can really help local businesses with its big data platform and unique technological advantages."
Founded in 2015 by Alibaba and Ant Financial Services Group, Koubei provides solutions of marketing, purchasing, membership management, bookings, and financial services for local businesses. Currently, the platform serves over 1.5 million businesses with an average of over 15 million transactions recorded daily.
Koubei recorded gross merchandise volume of RMB173 billion (US$25 billion) in 2016, and RMB73 billion (US$10.6 billion) during the fourth quarter of last year, up 52% quarter-on-quarter.
Last month, Alibaba Group and Ant Financial said they would invest US$1.25 billion in Ele.me, a food delivery application and the food delivery services provider for Koubei.
Silver Lake is a U.S. private equity firm focused on leveraged buyout and growth capital investments in technology and related industries. It previously invested in Alibaba and Ctrip in China.